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Cryptocurrency advocates have reacted warmly to an effort by asset manager Reality Shares to gain approval for a ‘partial’ Bitcoin ETF from US regulators.

Less Exposure, Less Rejection?

Announced in a prospectus filed with the US Securities and Exchange Commission (SEC) February 11, Blockforce Global Currency Strategy ETF aims to invest 15 percent of funds into CME Group and Cboe’s Bitcoin futures.

“The Fund is an actively managed exchange-traded fund… that is designed to provide investment exposure to global currencies, both fiat and virtual currencies, that have been widely adopted for use (e.g., as store-of-value, international remittance, foreign-exchange trading) throughout the world,” the prospectus summarizes.

The move comes as the SEC continues to adopt a highly risk-averse stance on the cryptocurrency ETF market.

In January, the applicants behind the VanEck/SolidX ETF withdrew their application due to the US government shutdown, resubmitting it when conditions improved.

Fundstrat Eyes Institutional Appeal

Last week, the SEC’s only Democratic commissioner said that the appearance of a regulated ETF was nonetheless inevitable.

“Getting the stamp of approval from the deepest and most liquid capital markets in the world is hard, and it should be,” Robert J. Jackson Jr. said in an interview.

Reality Shares began offering ETFs tracking blockchain companies last year, and appears keenly aware of the need to avoid too significant an exposure to Bitcoin markets under current conditions.

“The Fund will not invest directly in bitcoin,” it stressed.

Commentators nonetheless appeared buoyed by the news.

“The idea of currency diversified fund holding (Bitcoin) is brilliant and likely attractive to institutional and retail investors. And when approved, moves the ball forward for crypto as an asset class,” Fundstrat Global Advisors senior analyst Tom Lee wrote in response to the application.

What do you think about the Blockforce Global Currency Strategy ETF? Let us know in the comments below!

Fundstrat Global Advisors Head of Research, Tom Lee, holds that the current price of Bitcoin is wrong based on a range of factors. The BTC permabull has also refused to give any further price predictions.

Bitcoin’s Fair Value Between $13,800 and $14,800

According to Tom Lee, the current market conditions for Bitcoin are wrong. Bloomberg reports that the proponent has said BTC’s fair value is between $13,800 and $14,800.

Lee explained:

Bitcoin’s fair value, given the number of active wallet addresses, usage per account and factors influencing supply, is between $13,800 and $14,800. – Lee has said.

The analyst also added:

Fair value is significantly higher than the current price of Bitcoin. In fact, working backwards, to solve for the current price of Bitcoin, this implies crypto wallets should fall to 17 million from 50 million currently.

Commenting on the current market condition, Lee called “last year’s meteoric rally a “meltdown.” In the macroeconomic climate, treasury sales of initial coin offerings are the reasons for the divergence.

While he refused to propose any price target, Lee also outlined that should Bitcoin wallets approach a mere 7 percent of Visa’s 4.5 billion account holders, the cryptocurrency’s fair value would be $150,000 based on his model.

Grain of Salt

Lee’s statements, while optimistic, do raise a few questions. First off, while discussing Bitcoin’s current condition, the analyst refers to 50 million “crypto wallets.”

According to data from Blockchain.com, the number of Blockchain wallets is around 31.5 million. Even though this number will always increase, many of these wallets could be abandoned and it’s still nowhere near 50 million.

But Lee could indeed be proven correct in the long-term. While the price is down 85%, the number of “active wallet addresses” has only decreased by half since January’s peak, according to Bitinfocharts. While the network hash rate (i.e. network security) is still more than double what it was in January 2018 despite the recent difficulty adjustment to lower prices.

What’s more, transaction activity over the Bitcoin network could be simply decreasing as people are becoming more reluctant to spend their bitcoins at these price levels. In hopes BTC will go “to the moon” in the future (as Bitcoin’s history of market cycles shows), those who bought at higher prices are choosing to ‘hodl‘ as they are afraid of becoming Bitcoin pizza guy 2.0.

Meanwhile, Lee has previously said that Bitcoin will reach $25,000 by the end of 2018. He has since reduced his target to $15,000. This time, however, the permabull refused to give any price predictions.

“We are tired of people asking us about target prices,” he said.

What do you think of Tom Lee’s position on the current market conditions? Don’t hesitate to let us know in the comments below!